Bet on the Hare, Get the Tortoise: Clinuvel’s Story (ASX: CUV)

Good morning,

Welcome to today's edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.

We’ve all heard the story: The Tortoise and the Hare.

The race begins, and the Hare sprints far ahead. 

The Hare is also pretty gassed at this point, and doesn’t think the Tortoise will ever catch up.

… so it takes a nap.

Meanwhile, the tortoise keeps moving. 

Slowly and steadily towards the finish line.

The hare wakes up too late and rushes to the finish line, but the tortoise has already crossed it and won the race.

Now, in the stock market, some stocks are the Tortoise and some stocks are the Hare.

The slow-moving beast, or the fast-moving boom-bust trade.

The next company on my Biotech 165 Challenge, I think, might be the biggest tortoise of them all…

Clinuvel (ASX: CUV).

The next company on my Biotech 165 Challenge is an enigma to me.

One of the few ASX-listed biotechs that has actually brought a drug to market.

It has a Phase 3 catalyst this year for a serious condition.

A stream of cash from the drug sales.

$233 million in the bank. No debt. It pays dividends.

At a market cap of $480 million, almost half of its value is in cash. 

It trades like a breakeven industrial business… and the share price is trading near the lowest levels since 2018.

If you read through the Chairman’s address at the AGM last year, he talks about this disconnect directly:

“We are acutely aware that our share price does not yet reflect the value being built…”

He goes on to rue how undervalued Clinuvel is relative to its peers and the value of its disciplined capital management approach.

Now, in my opinion, there is only one true reason that people invest.

To make money.

The fundamental question every shareholder has when they consider picking up the phone to call their broker is…

If I buy a stock today, will the price be higher at some point in the future?

But some people like to bet on the Tortoise, and some people like to bet on the Hare.

This is the story of Clinuvel (ASX: CUV).

Clinuvel makes a drug called SCENESSE that activates melanin in the skin to provide photoprotection against sunlight.

It's a small, rice-grain-sized implant injected by a physician under the skin of the hip every two months.

It stimulates the body to produce melanin, the pigment that protects skin from sunlight.

The approved indication is Erythropoietic Protoporphyria (EPP).

EPP is a rare, inherited disorder that essentially makes people allergic to sunlight.

Brief exposure to sunlight can cause burning pain.

Before SCENESSE, the only answer was avoidance.

Stay out of the sun.

(It is really grim when you think about it.)

About 5,000 to 10,000 people globally have it, and it's classed as an orphan disease. 

(I might do a deep dive on orphan diseases one day, but they are essentially rare diseases that command high prices in small populations)

In FY25, Clinuvel delivered A$105.3 million in revenue and an NPAT of A$36.2 million.

This was driven by SCENESSE sales to EPP patients in Europe and the US.

The ninth consecutive year of profit. 

Think of this as Clinuvel’s The Cash Cow.

On the development front, SCENESSE is also being studied for Vitiligo.

Vitiligo is a depigmenting disease. 

The immune system attacks the cells responsible for pigmentation, leaving stark white patches across the skin. 

It affects roughly 1% of the global population. About 70 million people worldwide.

The current "gold standard" for full-body repigmentation is narrowband UVB phototherapy.

Basically, patients climb into a light booth (think of it as a clinical tanning bed) three times a week for 18 months. 

It works, eventually… but the time commitment is brutal, and adherence is poor.

Clinuvel’s theory…

Combine SCENESSE with the UVB booth, and you can cut that 18-month period to 6 months, with more even, durable repigmentation.

There is also a topical JAK inhibitor on the market called Opzelura. 

This product is set to do US$700–790 million in 2026.

(more on that in the competitors section)

But if you want to get a sense of Clinuvel’s product… a picture paints a thousand words.

Here are some of the progress photos so far:

Top-line results from the pivotal CUV105 Phase 3 are expected in 2H CY2026.

A second pivotal gold study, CUV107, commencing 2H 2026.

The goal of the study is to achieve repigmentation of at least 50% of affected skin (the T-VASI50 endpoint).

(and you can see from some of these images that repigmentation is being achieved)

So…

A cash cow. 

A short-term catalyst. 

Money in the bank. 

A promising technology.

But trading like a breakeven industrial.

Why?

Let’s dig a little deeper.

Shares are not just ways to make money, but also a vote on how the company is run.

Over the last three years, Clinuvel's shareholders have done something rare on the ASX. 

They've voted down the remuneration report at every single AGM.

For the curious, here's how the "two strikes" rule works:

Generally, when shareholders vote down a rem report, it's a message: we're unhappy; we want something to change. 

They often don't have a concrete alternative. Which is why the spill doesn’t get up.

So, what were they frustrated with?

Three things:

The Chairman of Clinuvel likes to write these letters to shareholders.

A well-written insight into how the company thinks.

BUT, when read together, they highlight the tension between the company and its shareholders.

I'd start with the Managing Director’s address at the AGM in October (a very good read if you have time):

The key theme: The Value of Time.

In it, the Managing Director details the company’s strategy going forward, in particular, how it intends to spend its cash.

Reading between the lines, it is clear that some Clinuvel shareholders want the company to put that $233 million to work more aggressively.

Either through larger R&D programs, M&A transactions, share buybacks or greater dividends.

But the CEO said this:

Cash is a strategic arsenal, providing credibility armour, executional sovereignty, shock absorption, and the privilege to fail.

Translation.

Defending the cash position is the priority.

Play defence, not offence.

Classic Tortoise behaviour.

That makes CUV a perfectly fine defensive hedge. 

But that may not be what people are buying biotech for (the 10x returns).

As I said, people buy shares to make money, and the real cost here is the opportunity cost.

Shareholders like to see capital deployed.

People like to bet on the Hare.

Even if they risk losing everything.

So, as a shareholder, there are two options if you don’t like things.

Vote or sell.

It looks like both are happening.

The second issue that I believe Clinuvel Shareholders had was with the Managing Director’s remuneration package.

Clinuvel’s Managing Director earned $5.2 million in the last financial year.

(This included a $2 million “retention award” payment)

Now, in my view, if the share price is going up… the MD’s pay package doesn’t matter as much to shareholders.

BUT, when the share price falls, the microscope is on.

And $5.2 million will cast a big shadow.

Clinuvel conducted a search for a new CEO, but according to a March letter to shareholders, the company felt that the existing Managing Director was still the best fit.

So nothing changes.

It's not necessarily the shareholders themselves that have voted down this remuneration report, but rather the proxy advisers to the shareholders… ACSI, ISS, Glass Lewis.

These proxy advisors play an interesting role in the ecosystem.

They represent the large institutional investors, and their job is to enforce governance norms.

Clinuvel’s CEO’s pay package was a red flag for these advisors, as it lay outside the standard deviation of pay packages at other ASX-listed companies.

However, in its Notice of Meeting, Clinuvel said that the appropriate peer group for benchmarking executive remuneration should include US-based companies.

I think that the most important line to understand how the company is thinking is this:

The company won’t give too much weight to the downward trend in the share price when assessing executive remuneration, provided that the company has achieved its strategic milestones:

Here, management says performance is not tied to the share price; it's tied to the company’s strategic milestones.

No matter how much the shareholders yell at the Tortoise, it won’t move faster.

I’m not a shareholder of Clinuvel.

But if you are, YOU get to decide whether you think that it's reasonable.

(Based on the case that the company has put forward.)

As I said, you get two options.

Vote or sell.

(Eventually, the price will be at a point when people start to think… okay, maybe now it's a buy).

And then markets will do market things.

Such is the balance.

The other major topic discussed in the AGM address was competition.

Will the cash cow continue to produce?

Will Vitiligo, the “growth” play, have an impactful uplift?

For years, SCENESSE has had a monopoly on systemic EPP treatment. 

However, two competitors creeping up on Clinuvel are best placed to challenge.

Tanabe Pharma and Disc Medicine.

And since the start of the year, there have been significant developments from both companies.

(Both, I think in Clinuvel’s favour)

Tanabe ran a Phase 3 trial of its product, which was completed in December 2021, and did not meet its primary endpoint.

In its second Phase 3, top-line results were published in January, and data were presented in March this year. Primary endpoint met.

While Tanabe’s oral therapy for EPP is a credible threat to SCENESSE, these results were not a slam dunk.

In particular, a safety concern with one serious adverse event where a patient withdrew from the study due to a malignant melanoma, which was assessed as related to the treatment.

That said, Tanabe will press forward and, in its press release, said that “With the positive data from Phase 3 INSPIRE study, we look forward to advancing [our drug] toward a planned NDA submission.”

So it looks like Tanabe will move ahead with a new drug application. 

This will take some time, but if successful, it will create the first meaningful competitor to the SCENESSE monopoly in EPP.

That’s a big IF, however.

… and we see with the next company, approvals are not guaranteed.

Disc submitted an NDA for bitopertin in September 2025 for accelerated FDA review.

However, on 13 February 2026, the FDA issued a Complete Response Letter:

While Disc Medicine DID show that the drug changes a biological marker linked with the disease, the regulators want stronger evidence that those changes translate into meaningful clinical benefits.

So the accelerated approvals were knocked back.

Topline data from the company’s Phase 3 trial are still on track for the back end of this year, and a revised decision is anticipated in mid-2027.

Disc Medicine just raised US$225 million in an upsized IPO in January.

The takeaway is this.

Neither treatment displaces SCENESSE today, but for Clinuvel shareholders, these two programs are worth keeping a close eye on.

The slow-and-steady mantra holds for now…

But the Hares have woken up and are chasing down the Tortoise to the finish line.

If either Tanabe or Disc gets approved, that will put a meaningful dent in Clinuvel’s Cash Cow.

So Clinuvel can’t be playing defence forever.

Clinuvel has to go on the attack. That’s where Vitiligo comes in.

A useful frame here is to think of Vitiligo as a spectrum rather than a single disease.

At the milder end, for patients with less than 10% of their body affected, the current standard of care is Opzelura. 

A topical JAK inhibitor from Incyte

Opzelura:

And it makes serious money. US$678 million in 2025, with Incyte guiding US$700–790 million for 2026.

But Opzelura isn't the product Clinuvel is competing with. 

CUV105 is enrolled exclusively in patients with more than 10% body surface area affected.

Different severity, different patient, different market.

So what do those more severely affected patients have today?

The classic alternative is 18 months of phototherapy in a UVB booth. 

But this doesn’t work well either. 

It’s slow, and adherence drops off a cliff after the first six months.

Clinuvel's pitch is to improve efficacy through systematic whole-body repigmentation when SCENESSE is paired with the UVB bed.

18 months drops to six months.

Whole-body repigmentation, not patches.

The real comparator for CUV105 is not Opzelura. It's the 18-month UVB booth, which is what >10% BSA patients are currently doing (if anything).

But there is one other competitor to pay attention to: AbbVie's Rinvoq (upadacitinib).

A once-daily oral JAK1 inhibitor. 

The Phase 3 trial met both co-primary endpoints in patients with 5% to 50% body surface area.

AbbVie filed with the FDA and EMA on 3 February 2026.

Rinvoq is a familiar product, and an oral formulation could be more palatable to patients.

But here is where Clinuvel is different.

Mechanism. Upadacitinib suppresses the immune attack. SCENESSE works upstream, activating the melanocortin pathway to stimulate the body's own repigmentation.

Safety profile. The entire JAK class carries FDA boxed warnings for serious infections, malignancy, MACE, and thrombosis. A long-term oral immunosuppressant is a different risk conversation than a peptide implant.

Skin type. CUV105 is specifically enrolling Fitzpatrick III–VI, darker skin types, in which vitiligo is most psychologically confronting and the existing JAK inhibitor trial data are thinnest.

Durability is the other open question. 

If SCENESSE-plus-UVB delivers lasting repigmentation compared with a JAK inhibitor, patients would need to keep taking it forever; that's a real differentiator. 

But we don't have that head-to-head data, and we won't until well after launch.

Clinuvel is like a team that is 4–0 up at halftime and still parking the bus.

A defensive masterclass, but not attractive football.

Capital deployment has been slow and methodical, 

With the company rather saying no to the right opportunity, than saying yes to the wrong one.

(Ideally, you would say yes to the right opportunity - but such is the conservative nature of the business)

This works for some shareholders, but not for others.

And that’s okay.

Some people want to bet on the Tortoise, some people want to bet on the Hare.

Clinuvel is in an enviable position, with a balance sheet that allows it to do what it wants.

The trouble is that this doesn’t always align with the shareholders.

There are real catalysts on the horizon, and the company has done well to solidify its foothold in the EPP market and continue growing revenue.

The competition is real, but the recent results (including the Complete Response letter for Disc and safety issues in Tabane’s trial) suggest that it might be a bit further away than first expected.

Clinuvel also has a pipeline of other drugs and treatments that I haven’t touched on today, but the focus and upside remain on Vitiligo.

Results coming soon. Let’s see how it lands.

A big thank you to Malcolm Bull, head of Australian operations, and Lachlan Hay, COO, for sharing the story with me.

See you all tomorrow,

The Armchair Analyst

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